Bitcoin Forum

What kind of effect will this have on the Bitcoin economy?  Holding so many coins give them immense power over the entire Bitcoin economy, as they'd be able to crash the market whenever they decide to pull the trigger.  They may try to sell them off slowly... or maybe they won't.  These are bureaucrats we're talking about, who are beholden to a lot of powerful people.  Has anyone pondered what would happen to the bitcoin economy once the Ulbricht trial is over, and all the coins are unloaded?

They won't sell them on the exchange.  It will be auctioned off like other forfeited property.  If you want to participate you will wire earnest money to the US treasury in advance.

You don't really think the sovereign nation of the United States is going to transfer >$200 million worth of coins to some place like BTC-e just so the operator can say "oops we got hacked" and retire the next day do you?

It depends on the liquidation strategy, if they smell in small peices and place gradule sell orders, then nothing much, slower growth.
If the dump into the buying market it will be the same as when a whale sells, the market will drop and probably rebound over time

They can hold them, never release them.  BTC has an actual limit in quantity.  Having 144,000 of them is kind of like holding a hostage.

US Government does NOT like BTC remember.

Correct, this is the most likely scenario.
I guess they could make 14 lots of 10,000 BTC each.

That's not the impression I got after watching 6 hours of the CSPAN hearings on Bitcoin. Did you watch that? There's a link around here someplace...

Here is day 2:

http://t.co/0ek2nwimi5

It's their unofficial reserve currency for if when the dollar crashes.

It's just a matter of time before the other mayor economic powerhouses (china, japan, EU) and upcomming markets (India, Brasil, etc) buy lots of bitcoin as well as a reserve currency.

it's indeed a pretty large amount (~0.6% of the 21 million and about 1.2% right now) but i doubt they'll use it to crash the market, it will likely not have a long term impact if they'd try that, especially not when we notice it's theirs.

Just a couple of people will get very cheap bitcoins before the market will recover.

huh? there hasn't been much indication that government is against BTC. and holding onto millions of dollars and doing nothing with it would be stupid. they might just auction the BTC to fund the FBI even more.

IMO, if any government gets involved, its going to lose every positive factor that bitcoin advocates appreciate.

It will just become another currency.

except that the government is unable to identify the identity of every bitcoin holder. oh, and they can just randomly generate new bitcoins out of thin air.

As I recall, the news of 144K bitcoin going from the possession of a drug dealer to the US government made the price go up.   ;D

but not after 21M right?

i don't know where you are getting at.. are you implying that government might start mining bitcoins?

the point is that dollars/euro's and any other currency is worthless because the fed/government can (and will) print unlimited amounts.

they can not do that with bitcoins. So the 144.000 bitcoins is all they will ever have, unless they BUY more, just like everyone else.

Or unless they use supercomputers to mine them, but their supercomputers are no match for our ASICs

their supercomputers are no match for your ASICs?

lol at all the unaware here. government officials had to have bought bitcoins

Bitcoin is divisible. That will only increase the value of the remaining coins in circulation.

I believe this is the correct answer. It won't do much to the exchange rate, I think, because the buyer(s) may not sell them on an exchange, either. Of course, I could be wrong about that.  :)

maybe they don't, but they do like seizing money. the feds love FED bucks.

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

I would estimate it will take at least 2 years to put DPR on final trial and get sentencing finalised (or aquittal) and officially have the funds confiscated (as i think they are just "seized" at present, and held.... awaiting further investigation outcome).

2 years is a long time in "BitCoin World" and the price is likely to rise quiet a lot in that time, amongst other developments!
I know the FBI have said they will sell them off, but i think they may reconsider if the price increases and other countries "participate" to a greater scale.
Holding 144,000 BTC could put the US in a very good position financially and in "BitCoin World" and i think the "smart derision" would be for them to hold them.
In this time, i also think they are likely to confiscate more Coins.....

It will be interesting to see what they do with them! And good news if they do keep them (even though this wont be popular with BitCoiners)

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

Dont you just love the law  :-[
whatever happened to innocent UNTIL proven guilty...... :'(

hence the constant outcry from civil libertarians about asset forfeiture laws. they are unconstitutional and unethical.

Forfeiture is a separate action it has its own procedures and its own burden of proof.  There is no such thing as innocent until proven guilty that is just a quaint phrase to make people sleep good at night.  All you get is due process.  However as indicated for a variety of reasons forfeiture almost never happens until long after the criminal trial is complete.   

Also to correct your prior post, the coins don't belong to the FBI, they never did belong to the FBI, and they never will belong to the FBI.  Prior to forfeiture they belong to the original owner they are just frozen.  If the government loses their forfeiture case they return to the original owner, if the government wins the assets becomes the property of the US TREASURY.  The DOJ is mandated with selling off forfeited assets as the government simply wants the cash value not the asset.

This isn't anything new or novel.  Every year for the past century the DOJ has sold off billions and billions of dollars worth of forfeited assets.  Cars, boats, planes, real estate, luxury goods, stocks, bonds, gold, jewelry, etc.  Even rare fine art and antiques.  Just about anything you can imagine the DOJ has seized and sold it.

<< fully agree. I;m in the UK and we dont have a "constitution" as such, but things are very similar here too!
(i was recently in court for not paying "council tax" (everyone here has to pay this if they live in a house, unless you are on a low income). when i offered a full & prepared defence i was quickly told "you must be mistaken, as you are not entitled to a defence"... needless to say, i was found guilty....  )

Keeping them would mean treating bitcoins like USD, which just isn't going to happen any time this decade.

Before they liquidate, they will say they "accidentally" threw out the hard drive they were storing them on and at a later date re-allocate the "lost" bitcoins to the CIA. ez game

Quote of the day.

The law is to presume someone's innocent until they're proven guilty.  This is very different from someone actually *being* innocent until proven guilty, which would be a bit of an epistemological magic trick.

If they sell the coins then the market will crash and then it will recover in an hour or something. If they don't sell then nothing will happen. In any case nothing will happen.

Yeah the law DOESN'T presume you are innocent until proven guilty, like I said that is something people say to make them sleep well at night.  If the law presumed you were innocent until the state can proven it then the state would be unable to do things like perform arrests with mere probable cause (a far lower burden then "beyond all reasonable doubt"), remand defendants (holding you in prison without bail until such time as you can prove that you are not guilty), or place the burden/cost of a defense on the defendant even one later found to be innocent (yeah maybe you don't lose your freedom but you still lose the time and cost of your successful defense).

All you are guaranteed is due process.  Nothing more, nothing less.

Yes, they will auction them off, as D&T describes. 

If the auction is well-advertised and transparent, I predict the bitcoins sell for *greater* than the prevailing market price at the time.  People on this forum worry about large sellers crashing the price.  But remember, large buyers wanting to get in have the opposite worry (rallying the price too high before they've established their position).  This auction would be a good opportunity for wealthy individuals or funds to establish a large position without slippage. 

They are all involved. Their rules are already in place and regulation is everywhere. What government did do in the United States was to clarify how it plans to react to it. There was one speaker (in those 6 hours of vids) that said, major criminals won't use Bitcoin because it is so traceable.

How did they seize all those coins? I thought part of the appeal of Bitcoin was that your coins couldnt be seized or frozen as long as nobody knows your wallet password...

One you hand your coins over to somebody else to manage for you (deposit them in an account on some web site), they aren't your coins any more.

The US Government doesn't miss business opportunities.

They arrested him with his computer on and his wallet open.  Since he was under surveillance, they probably timed the arrest for WHEN he had his wallet open.

I'd expect they will keep it for another year or so.  ::)

If they sell the coins I think it would be the same as with any other stolen (oops, confiscated) property - via a private auction. So I doubt these coins would see the market right away. But definitely, some of it would, eventually.



Which wallet allows a withdraw without a confirmation password / full decrypt? I think he might have cooperated on this one, otherwise seems unlikely. And really, having all wallets with 100k coins open and decrypted at the same time? He's Dread, not Dumb :)

The price will crash from 10,000 to 7,000 and take 3 weeks to recover.

With all the bad news from china i doubt that we 'll see even threads about 10000$ for a while. Let alone the actual price...

A 30% drop from 144k BTC? You're nuts.

You are so wrong bra, according to clarke moody mt gox, an at the market sell order of only 87,000 btc will bring the price down to $50. check it for yourself if you don't believe me yip yip!

The price is not 10,000 eighter, so in future it can happen...

what did u just say brah?